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David Cameron to seek action on tax avoidance at EU summit David Cameron to seek action on tax avoidance at EU summit
(34 minutes later)
David Cameron is to urge EU leaders to back global action against tax evasion and "aggressive" tax avoidance that is causing nations "staggering" losses.David Cameron is to urge EU leaders to back global action against tax evasion and "aggressive" tax avoidance that is causing nations "staggering" losses.
The prime minister will meet his European counterparts in Brussels later to discuss ways of cracking down on those who do not pay their fair share.The prime minister will meet his European counterparts in Brussels later to discuss ways of cracking down on those who do not pay their fair share.
It comes amid a row over the tax paid by firms like Google and Amazon.It comes amid a row over the tax paid by firms like Google and Amazon.
The CBI has warned politicians not to "moralise" about tax or rush to judgement without the facts.The CBI has warned politicians not to "moralise" about tax or rush to judgement without the facts.
The business lobby group said paying tax was not "optional" and that firms must make "responsible judgements" with the interests of their shareholders, stakeholders and society at large in mind.The business lobby group said paying tax was not "optional" and that firms must make "responsible judgements" with the interests of their shareholders, stakeholders and society at large in mind.
'No absolutes''No absolutes'
But it warned politicians against engaging in a "moral debate" over the issue and said they must consult with business before introducing any new rules.But it warned politicians against engaging in a "moral debate" over the issue and said they must consult with business before introducing any new rules.
"As politicians pursue fairness it is important that any criticisms are grounded in fact and hasty solutions or political point-scoring do not trigger long term unintended consequences," the organisation's chairman Roger Carr said."As politicians pursue fairness it is important that any criticisms are grounded in fact and hasty solutions or political point-scoring do not trigger long term unintended consequences," the organisation's chairman Roger Carr said.
"Tax avoidance cannot be about morality - there are no absolutes.""Tax avoidance cannot be about morality - there are no absolutes."
He urged Mr Cameron and other leaders "to fix the rules internationally, not unilaterally", adding that "independent action can cost competitiveness and cause confusion".He urged Mr Cameron and other leaders "to fix the rules internationally, not unilaterally", adding that "independent action can cost competitiveness and cause confusion".
The taxation issue is on the agenda of the latest EU summit - which will also discuss energy policy - at the request of the UK, France and Germany.The taxation issue is on the agenda of the latest EU summit - which will also discuss energy policy - at the request of the UK, France and Germany.
Mr Cameron has written to EU leaders ahead of the meeting urging a US-style cross-border tax information exchange. The UK, Germany, France, Spain and Italy are currently testing such a system and want to launch it by the end of the year.Mr Cameron has written to EU leaders ahead of the meeting urging a US-style cross-border tax information exchange. The UK, Germany, France, Spain and Italy are currently testing such a system and want to launch it by the end of the year.
Mr Cameron also wants G8 and EU meetings to include country-by-country reporting of where companies pay their tax.Mr Cameron also wants G8 and EU meetings to include country-by-country reporting of where companies pay their tax.
The BBC's Europe Correspondent Matthew Price said there was "growing unity" about the issue across the EU, with an estimated one trillion euros lost every year due to individuals and companies not paying as much tax as they could do.The BBC's Europe Correspondent Matthew Price said there was "growing unity" about the issue across the EU, with an estimated one trillion euros lost every year due to individuals and companies not paying as much tax as they could do.
With the support of key European allies, our correspondent added, Mr Cameron hoped to use the UK's current leadership of the G8 as a catalyst for lasting change.With the support of key European allies, our correspondent added, Mr Cameron hoped to use the UK's current leadership of the G8 as a catalyst for lasting change.
Low-tax regimesLow-tax regimes
After the four-hour summit, Mr Cameron will travel to Paris to meet French President Francois Hollande at the Elysee Palace where co-operation on tax evasion and avoidance as well as tackling corporate secrecy will again be on the agenda.After the four-hour summit, Mr Cameron will travel to Paris to meet French President Francois Hollande at the Elysee Palace where co-operation on tax evasion and avoidance as well as tackling corporate secrecy will again be on the agenda.
The meetings come two days after Mr Cameron wrote to 10 British overseas territories and crown dependencies, including the Cayman Islands and the Isle of Man, urging them to "get their house in order" and sign up to international treaties on tax. Critics claim such places, which operate low-tax regimes, are used by companies for tax avoidance or evasion.The meetings come two days after Mr Cameron wrote to 10 British overseas territories and crown dependencies, including the Cayman Islands and the Isle of Man, urging them to "get their house in order" and sign up to international treaties on tax. Critics claim such places, which operate low-tax regimes, are used by companies for tax avoidance or evasion.
Tax avoidance, where companies operate within the rules to avoid paying taxes, and tax evasion, which is outside the law, have risen high on the political agenda in recent months.Tax avoidance, where companies operate within the rules to avoid paying taxes, and tax evasion, which is outside the law, have risen high on the political agenda in recent months.
High-profile companies like Google, Amazon and Starbucks have faced criticism in the UK for the low levels of tax they appear to pay compared with the size of their businesses.High-profile companies like Google, Amazon and Starbucks have faced criticism in the UK for the low levels of tax they appear to pay compared with the size of their businesses.
Labour leader Ed Miliband is expected to accuse Google later of going to "extraordinary lengths" to avoid making payments to the Treasury. Speaking on Wednesday, Labour leader Ed Miliband accused Google of going to "extraordinary lengths" to limit the amount of tax they pay in the UK.
The company's UK sales are worth £3.2bn, but most are routed through Ireland, meaning it paid £6m in corporation tax in 2011.
The company's executive chairman Eric Schmidt has insisted the company "has always aspired to do the right thing", adding that "international tax law could almost certainly benefit from reform".The company's executive chairman Eric Schmidt has insisted the company "has always aspired to do the right thing", adding that "international tax law could almost certainly benefit from reform".
'Cat and mouse''Cat and mouse'
Deputy Prime Minister Nick Clegg said it was unsurprising that firms were trying to exploit the "crack and crevices" of national tax laws and said he had raised the issue with Mr Schmidt at a Downing Street reception earlier this week.Deputy Prime Minister Nick Clegg said it was unsurprising that firms were trying to exploit the "crack and crevices" of national tax laws and said he had raised the issue with Mr Schmidt at a Downing Street reception earlier this week.
The government was reducing corporation tax, he said, and, in return, it expected firms to pay their fair share of tax.The government was reducing corporation tax, he said, and, in return, it expected firms to pay their fair share of tax.
He acknowledged individual countries' tax systems were often "arcane" and were struggling to keep pace with "disembodied" businesses operating across national borders.He acknowledged individual countries' tax systems were often "arcane" and were struggling to keep pace with "disembodied" businesses operating across national borders.
"We have got to make sure the rules apply much more evenly and strictly across the piece and so big companies cannot play cat and mouse with different national tax administrations," he said."We have got to make sure the rules apply much more evenly and strictly across the piece and so big companies cannot play cat and mouse with different national tax administrations," he said.
Apple boss Tim Cook defended the firm's practices when he appeared before the US Congress on Tuesday, insisting it complied with both the letter and the spirit of the law.Apple boss Tim Cook defended the firm's practices when he appeared before the US Congress on Tuesday, insisting it complied with both the letter and the spirit of the law.
Oxfam, meanwhile, has suggested people using tax havens are depriving the world of more than £100bn in lost revenue.Oxfam, meanwhile, has suggested people using tax havens are depriving the world of more than £100bn in lost revenue.
"Talking tough on tax whilst continuing to usher a third of the world's wealth into UK tax havens, risks making a mockery of David Cameron's leadership at the G8 Summit in June," its head development finance and public services Emma Seery said."Talking tough on tax whilst continuing to usher a third of the world's wealth into UK tax havens, risks making a mockery of David Cameron's leadership at the G8 Summit in June," its head development finance and public services Emma Seery said.